Punjab National Bank Q1 Results: Net profit up 214% YoY to $555 Mn
Punjab National Bank posted a 214% YoY rise in Q1FY27 net profit to $555 Mn, aided by lower provisions. Operating profit grew 6.2% to $794 Mn. Gross NPAs were 2.78%, with RoA at 1.04%.
*this image is generated using AI for illustrative purposes only.
Punjab National Bank reported a net profit of $555 Mn for the quarter ended June 2026 (Q1 FY27), marking a 213.6% year-on-year increase from $146 Mn in the corresponding quarter of FY26. The public sector lender’s operating profit rose 6.2% YoY to $794 Mn, supported by controlled operating expenses and improved asset quality metrics.
The bank’s total income for the quarter was $3,933 Mn, while total expenses stood at $3,139 Mn, a decline of 1.5% YoY. Operating expenses fell 13.1% YoY to $804 Mn, primarily driven by a 12.2% drop in establishment expenses to $479 Mn. This cost efficiency contributed to an improvement in the cost-to-income ratio, which declined to 50.31% from 51.79% in FY26.
Asset Quality and Capital Position
As on June 2026, the bank’s gross non-performing assets (NPAs) stood at $3,738 Mn, representing 2.78% of total advances. Net NPAs were recorded at $363 Mn, or 0.28% of advances. The provision coverage ratio (PCR) including written-off accounts remained robust at 97.23%.
Fresh slippages during the quarter totaled $211 Mn, while cash recoveries amounted to $89 Mn. Total recoveries, including those from written-off accounts, reached $295 Mn.
| Metric | Q1 FY27 (Jun’26) | Q1 FY26 (Jun’25) | Change |
|---|---|---|---|
| Net Profit: | $555 Mn | $146 Mn | +213.6% |
| Operating Profit: | $794 Mn | $748 Mn | +6.2% |
| Total Income: | $3,933 Mn | $4,108 Mn | -5.2% |
| Gross NPAs (%): | 2.78% | 3.05% | Improved |
| Net NPAs (%): | 0.28% | 0.31% | Improved |
What the Numbers Show
The significant jump in net profit was largely driven by a reduction in provisions rather than operational income growth. Provisions other than tax fell sharply to $57 Mn in Q1 FY27, compared to $172 Mn in FY26. While interest income grew modestly by 2.9% YoY to $3,475 Mn, other income contracted by 17.7% to $458 Mn, indicating that the bottom-line expansion is attributable to improved asset quality and lower provisioning needs rather than top-line momentum.
Key Financial Ratios
The bank’s net interest margin (NIM) for the quarter stood at 2.50%, slightly below the FY26 annual average of 2.70%. Return on assets (RoA) improved to 1.04%, surpassing the bank’s guidance of above 1%. Return on equity (RoE) was recorded at 17.33%.
| Ratio | Q1 FY27 | FY26 |
|---|---|---|
| NIM (%): | 2.50% | 2.70% |
| RoA (%): | 1.04% | 0.89% |
| RoE (%): | 17.33% | 15.67% |
| Cost-to-Income (%): | 50.31% | 51.79% |
Balance Sheet Highlights
Total business grew by 10.2% YoY to $316.70 Bn as on June 2026. Advances expanded by 12.7% YoY to $134.49 Bn, while deposits grew by 8.5% YoY to $182.21 Bn. The credit-deposit (CD) ratio improved to 73.8% from 73.6% in March 2026.
Capital adequacy remained strong, with the CRAR at 18.13% and Tier-1 capital ratio at 16.03%. Common Equity Tier-1 (CET-1) capital ratio stood at 14.52%.
Historical Stock Returns for Punjab National Bank
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +0.70% | +2.88% | +4.97% | -8.47% | +9.87% | +221.40% |
Will Punjab National Bank's net profit growth remain sustainable in Q2 FY27, or was the 213.6% surge primarily a one-time benefit from reduced provisioning?
How will the contraction in other income (down 17.7% YoY) impact the bank's ability to diversify revenue streams beyond interest income in the coming quarters?
Given the slight decline in Net Interest Margin (NIM) to 2.50%, what strategies is the bank employing to protect margins amidst potential rate volatility and competitive deposit pricing?
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